Vigorous Questions On Severability, Medicaid On Final Day

The justices heard from the opposing lawyers about issues as basic as ‘what is liberty?’ and whether it’s better to ‘fix’ flaws in legislation or scrap it entirely. Legal analyst Stuart Taylor, Jr., talks with Jackie Judd about the last 2.5 hours of this historic week.

JACKIE JUDD: Good day and welcome to Health Reform And The Court. I’m Jackie Judd. The third and final day of arguments at the Supreme Court on the health care reform law is over. Today, the justices considered two very different questions. If the individual mandate is struck down, can the rest – or part – of the law remain intact? And, second, did Congress overstep its authority by expanding the Medicaid program? Once again, legal contributor Stuart Taylor joins us. Welcome back, Stuart.

STUART TAYLOR: Nice to be here again.

JACKIE JUDD: Before we started taping, you said that at the end of these three days, six hours of arguments, the opposing lawyers did something slightly unusual, by stepping back from the minutiae, as you called it, to talk in grander terms about what this was really all about.

STUART TAYLOR: Right. That was Solicitor General Don Verrilli at the end of his argument about why Medicaid expansion should be sustained, which was the last of the arguments. So coming to the end of the six hours, he said, let me take half a step back, and he gave an impassioned plea for saving this law, on grounds of liberty. He invoked the term liberty. By the way, liberty is Justice Kennedy’s kind of leitmotif.

JACKIE JUDD: [He’s the] swing vote?

STUART TAYLOR: Yes, swing vote. Central theme, not an accident. And [Verrilli] said: This law would secure the blessings of liberty to millions of people who are now uninsured. People with diabetes, people with heart conditions who are now unable to live normal lives. We can secure those blessings of liberty to them. He said: Please, think about that while you’re deciding what to do with this work of the president and the Congress and give some respect to them, too.

JACKIE JUDD: And Paul Clement’s response?

STUART TAYLOR: Paul Clement came back and, after making a couple of more minute points, closed with a respectful reference to what Verrilli had said. Then he said: It’s a strange conception of liberty that would force millions of people to buy insurance policies that they don’t want. And so, there you sort of had it, Verrilli arguing at a very general level, Clement going right to the central objection.

JACKIE JUDD: And let’s get specific for a moment. This morning, they did argue about: If the mandate is struck down, can the rest of the law, or most of it, stay intact? What were the highlights of that hour and a half?

STUART TAYLOR: It’s hard to pick a highlight, because there were three lawyers arguing three different positions and there were eight justices saying everything under the sun. But the general tenor of it was Clement, whom I just mentioned, the lawyer for the states challenging this, said, in essence, you should strike the whole law down, all 2,700 pages. Just give Congress a clean slate so they can start over and decide what they want to do now.

And his point was: A lot of these provisions are interdependent. Some of them, obviously, as the solicitor general said, and I’ll get to that in a minute, some of them are so closely related that it doesn’t make sense to keep some while getting rid of the individual mandate, which would provide money for them. Others are a little more tangentially related, but still related, and others are way off in left field. And they were just sort of stuck in there, because, you know, this is the vehicle. So that’s Clement.

Deputy Solicitor General Ed Kneedler, [in] the only part of the argument that wasn’t done by Don Verrilli, his boss, said: First, you shouldn’t breach severability at all in this case. Leave that to future cases, except for one little provision where the states had raised it. If you’re going to reach severability – and by the way, the justices didn’t seem to buy the first part of that, so I think they are – you should uphold most of the law. Your purpose should be to salvage as much of Congress’ handiwork as possible.

There are two provisions that you should strike down, not because they are unconstitutional — these are the heart of the act – but they don’t work without the mandate. Because these are the so-called “guaranteed issue” and “community rating” provisions that basically say: Insurance companies cannot hold your medical history against you when they are setting rates and deciding whether to take you. And he said that doesn’t work without the mandate, because if people know they can sign up at the last minute once they get sick, for insurance, all the healthy people will bail out. They won’t get insurance. We have to force them to get insurance to prevent the insurance industry from basically going down the drain while people leave these positions.

JACKIE JUDD: One of the issues that has received less attention than the other ones we’ve been talking about the past three days is this expansion of Medicaid, even though it will affect many millions of people. What is the core of the argument there?

STUART TAYLOR: That was the last hour. Clement went first, because he’s challenging. And he said, using past-case law, the problem with the Medicaid expansion is that it coerces the states to participate. It effectively leaves them with no choice.

JACKIE JUDD: How did the liberal bloc challenge that?

STUART TAYLOR: They said, and Justice Breyer was particularly active here, in essence: Oh, the law doesn’t really mean that. It may say that, but that’s just what Medicaid expansions have said in the past. In reality, the government would be reasonable, the courts would require them to be reasonable under the Administrative Procedure Act, and you’re not going to see some arbitrary ripping away of all of the state’s Medicaid money, just because it refuses to go along with this expansion. The liberals and Deputy Solicitor General Ed Kneedler – I’m sorry, this was Verrilli again – they said: Look, the reason the states are all going to go along with it is because it’s a good deal. It’s not because they’re being coerced to.

JACKIE JUDD: Because the federal government, particularly in the earlier years, will be picking up 100 percent of the additional costs.

STUART TAYLOR: 100 percent in the earlier years, then 95 percent for a couple of years, and then 90 percent supposedly indefinitely, although the states might worry that that could change.

JACKIE JUDD: One final question that has to do with the timing of a ruling – when do you expect it?

STUART TAYLOR: Late June, probably very late June. Conceivably early July. But they almost always finish in late June, and they almost always serve up the biggest, boldest, most difficult cases last. Particularly when they argue late in the term.

JACKIE JUDD: And drop it right into the middle of a presidential campaign.

STUART TAYLOR: Exactly.

JACKIE JUDD: Great having you here this week. Thank you, Stuart.

STUART TAYLOR: Nice being here, thank you.

JACKIE JUDD: And a reminder to you to tune in to our 30 minute live webcast Thursday, March 28 at 11:00 a.m. Eastern. KHN’s Mary Agnes Carey will lead a panel discussion about this historic week. Joining her will be Stuart Taylor, Tom Goldstein of SCOTUS blog and Julie Rovner of NPR. The panel will also answer your questions, which you can send to live@kaiserhealthnews.org. I’m Jackie Judd.